How Romney's waivers would work

Gov. Mitt Romney says he has a plan that would allow states to skirt some of the biggest pieces of the health care reform law — a proposal that could punch gaping holes in the federal law his critics say he inspired.

But it’s far from a complete repeal. Instead, Romney would use the law’s “state innovation waivers” to allow the states to opt out of some of the most fundamental pieces of the Affordable Care Act: the individual mandate, the health insurance exchanges and the requirements for some employers to provide coverage or face fines, a Romney aide tells POLITICO.

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Then, he says, he’d follow up by asking Congress to repeal the law through budget reconciliation rules — which could allow Republicans to get rid of much of the law, but not all of it, with just 51 Senate votes.

“I’ll grant a waiver on Day One to get [repeal] started,” Romney said at Tuesday’s debate in New Hampshire. “On Day One, granting a waiver for all 50 states doesn’t stop in its tracks entirely Obamacare. That’s why I also say we have to repeal Obamacare, and I will do that on Day Two, with the reconciliation bill, because as you know, it was passed by reconciliation, [with] 51 votes.”

The state waiver provision, sponsored by Sen. Ron Wyden (D-Ore.), was written into the law to allow states to come up with their own health care reform proposals as long as they meet strict requirements: that they cover as many people as the law would have, be budget neutral and ensure coverage is just as affordable and comprehensive.

The Romney aide said the campaign believes the language is written in a way that gives the HHS secretary enough latitude to read a waiver application in a much more generous way, with few — if any — of the same demands. For instance, a requirement to provide “comparable coverage” could be interpreted by the Obama administration as covering the same number of people — but a Romney adminsitration could interpret it as just ensuring that the same number of plans are available.

Under Romney’s theory, states could ask for the waivers immediately in 2013 — even though the law says they wouldn’t go into effect until 2017. It’s a date that a Romney administration likely wouldn’t be able to change without Congress, but his advisers are looking into the issue.

The Romney aide said the campaign believes there are enough potential delays in writing the regulations that the 2014 provisions won't go into effect in time. Under the campaign's worst case scenario, the requirements would have to go into effect in 2014 and get waived three years later.

The aide compared the health law waivers to so-called Section 1115 waivers in Medicaid, which allow states to comply with a federal law in a variety of different ways.

The waivers, dubbed Section 1332 waivers, have gotten attention from Democrats on the Hill. Wyden and Sen. Scott Brown (R-Mass.) have introduced a bill to move their effective date up to 2014. The legislation has been endorsed by President Barack Obama.